Spend under Management refers to the total amount of money an organization spends on goods and services that are being actively managed by the procurement function. This includes all spending that is subject to procurement policies, procedures, and controls, such as negotiated contracts, supplier management programs, and procurement technology systems.
Spend under management is a key performance indicator for procurement organizations and is used to measure the effectiveness and efficiency of procurement activities. Procurement professionals can drive cost savings, improve supplier performance, increase compliance, and reduce organizational risk by increasing the amount of spend under management.
To calculate spend under management, procurement professionals typically begin by identifying all of the spend categories that are being actively managed. They then use procurement technology systems and spend analytics tools to analyze spending data and identify opportunities for cost savings and process improvements. By actively managing more of the organization's spend, procurement professionals can improve their strategic impact and contribute more to the organization's overall success.